A tax is best offence

Sideshows sometimes show up fundamental flaws in our system. For example, the little drama going on about Amar Singh, the Bachchans and income tax returns demonstrates gross political immaturity. India has been a democracy for almost 60 years now. Yet the system is sufficiently malleable for both suspicions and allegations of politics-inspired tax harassment to survive. Virtually all parties have been both accused and accusers, and the popular feeling is that hanky panky is a safer assumption than coincidence. We are fairly unique among working, stable democracies in harbouring this problem. America’s income tax collectors are notorious among their fellow citizens for their often highhanded and obtuse ways. And America’s politics has been sharply polarised for years now. But the most morally flexible of American political operatives won’t dream of using taxmen as political blunt instruments — institutional structures won’t bend that far without audibly cracking.

That India’s tax administration is noticeably less autonomous than it should be is one of the problems. A Kelkar report on the finance ministry had recommended, among other things, making tax collectors far less conscious of the ministry than it is now. Once Parliament sets tax laws, there’s really no need for ministerial supervision at all. What we have is a system where tax officials bribe ministers’ secretaries to get preferred postings. Given such ethos, tax authorities have absolutely no way of avoiding political interference even if they have the will.

Curiously, while politicians have often claimed to be victims of targeted tax scrutiny, they have never advocated the obvious reform. No doubt all politicians understand the general utility of politically clued-in tax authorities — today you scream blue murder that you are a target of vendetta, tomorrow, in power, you have the luxury of denying political misuse of tax men. Which is why while popular opinion tends to find these allegations credible, it finds it hard to sympathise with the victims.